The Farnborough Airshow contributed to strong profit growth for London's chain hotels during July, according to the latest HotStats survey from TRI Hospitality Consulting.

Income before fixed charges (IBFC) - also known as gross operating profit - increased by 19.8% to a daily figure of £80.27 per available room compared to the same month a year earlier. With little year-on-year change in average occupancy, it was the impressive 15.2% jump in achieved average room rate to £131.27 that fueled higher profits.

The biennial Farnborough Air Show celebrated its 60th anniversary this year and ran from 14 to 20 July. The exhibition attracted 132,636 business visitors and 153,000 public visitors, an overall 5.8% increase on turnout to the same event in 2006.

'As the aviation industry and public gathered to watch the latest fighter planes scream over the Hampshire countryside, profit levels also took off for London's chain hotels. The healthy boost Farnborough gave to rates was particularly welcome in this uncertain economic climate,' said Charles Scudamore, director, TRI Hospitality Consulting.

Total sales in London were up by 14% helping payroll as a percentage of total revenue drop by 1.9 points to 22.1%. Farnborough also had a positive effect on London's year-to-date figures with IBFC growth at 7.3% outstripping total revenue growth of 6.7%.

In the rest of the UK the impact of rising costs was notable for the second consecutive month. The sample of 401 chain hotels reported a 3.2% fall in daily IBFC to £36.26 per available room despite total sales edging up by 0.3%.

The drop in profit was the result of reduced demand and weak rate growth that caused a 0.3% dip in room sales. The figures reveal an improvement on the previous month, however, when IBFC fell by 6.9% and total sales by 1.1%.

In the three months to June, the number of overseas visitors to the UK dropped by 4% to 8.4 million according to the latest International Passenger Survey. Visitors from North America were down year-on-year by 7% to 1.2 million, while those from Europe dropped by 4% to 6 million. Visitors from the rest of the world increased by 1% to 1.1 million.  Despite the overall drop in overseas visitors, the amount they spent while in the UK increased by 1% to £4.1 billion during the three-month period.